COVID-19 has impacted every industry. Take the financial world where banks and financial institutions have lent trillions of dollars as part of Paycheck Protection Programs while experiencing record low levels of interest rates. These factors and others have impacted overall profitability which is forcing banks to reinvent businesses with new offerings and capabilities to ensure their success in a post-pandemic world.
Here are five avenues we see financial institutions taking in 2021:
Open Banking API’s The financial world we grew up with is fading thanks to the emergence of open banking and the rise of fintech. Traditionally viewed as a threat, traditional businesses will begin collaborating with fintech in 2021 to open up new business opportunities and revenue streams. For example, retail banks offering mortgage products will collaborate with fintech businesses such as Plaid and DocuSign, which offer account aggregation services that replace traditionally paper-intensive processes. Through these partnerships, loan issuance cycles will be cut by nearly 20 percent and free customers from the process altogether.